Since the SUTA rates changes are made at the end of each year and there is much discussion about changes to the FUTA rate, the available 2017 rates were used for FUTA and SUTA.

Note: For this textbook edition the rate 0.6% was used for the FUTA tax rate for employers.

Example 5-8

The Iqbal Company of Georgia had a FUTA taxable payroll of $215,600 and a SUTA taxable payroll of $255,700 with a 5.6 percent SUTA tax rate. The company would pay unemployment taxes of:

FUTA $215,600 0.006	=	$1,293.60
SUTA $255,700 0.056	=	14,319.20
Total taxes		$15,612.80

Kresloff Company has only two employees and is located in a state that has set an unemployment tax for the company of 4.8 percent on the first $12,000 of each employees earnings. Both employees are paid the same amount each week ($900) and have earned $11,500 up to this weeks pay. The unemployment taxes that the company must pay for this weeks pay would be $48. FUTA tax (both over $7,000) = $0.00 SUTA tax ($1,000 0.048) = $48.00 ($500 of each employees pay is under the state taxable limit of $12,000)

In September 2018, Manson Paint Corporation began operations in a state that requires new employers of one or more individuals to pay a state unemployment tax of 3.5% of the first $7,000 of wages paid each employee.

An analysis of the company's payroll for the year shows total wages paid of $188,950. The salaries of the president and the vice president of the company were $18,600 and $14,500, respectively, for the four-month period, but there were no other employees who received wages in excess of $7,000 for the four months. Included in the total wages were $930 paid to a director who only attended director meetings during the year, $6,310 paid to the factory superintendent, and $1,860 in employee contributions to a cafeteria plan made on a pretax basis-for both federal and state.

In addition to the total wages of $188,950, a payment of $2,200 was made to Andersen Accounting Company for an audit it performed on the company's books in December 2018. Compute the following; round your answers to the nearest cent.

a. Net FUTA tax	$_______
b. SUTA tax	$_______